DIRECT MARKETING OF AGRICULTURE PRODUCTS: A NEW INITIATIVE FOR INDIAN FARMERS INTRODUCTION Direct marketing of agriculture produce involves selling a product from the farm directly to customers. Direct marketing is a long felt need of the farmers and consumers of the country as it goes a long way in ensuring higher remuneration to the farmers and meeting the satisfaction level of consumers through direct sale of the agricultural commodity by the farmers to the consumer at affordable prices. Direct marketing of agricultural produce helps in complete elimination of middlemen and commission agents who charge high level of commission fee from the agriculturists/farmers coming to the market yards for selling their produce and then artificially inflate the retail prices. Many growers choose to direct market their products because it allows for better potential profit margins compared to selling wholesale. The benefits realized by cutting out the middleman and getting direct feedback from the customer can make these marketing avenues worth the labour required to sell directly. AN OVERVIEW OF DIRECT MARKETING CHANNELS FARMER’S MARKET A farmer market is a common facility or area where several farmers or growers gather on a regular, recurring basis to sell a variety of fresh fruits, vegetables and other farm products from independent stands directly to consumers. Farmers markets are flexible market channels that accommodate producers with various levels of production experience, quantity of product and product mix. Advantages of Farmer Markets Farmers markets have several advantages, including no requirements for sales volume, no standard pack or grade, access to market information. Springboard to other market channels, advertising and promotion. A great way to build customer loyalty, gets direct feedback, and promote your farm business. Disadvantages of Farmer Markets Farmers markets also have some disadvantages, including requires selling face-to-face, many small transactions, high marketing costs, gruelling market schedules, limited space for vendors. Farmer’s market sales can make for notoriously long days, being off property or investing in staff, running trucks, and dealing with weather related uncertainty on market days. Selling at market requires a high level of customer interaction. Farmer need to have proper transportation and storage, the ability to accept multiple forms of payment, and will need to develop a pretty good idea of what you’ll sell on a given day. Farmer also wants to keep in mind the required vendor fees and other requirements for the market. ON FARM RETAIL On-farm retail describes the various ways in which producers sell their products directly to consumers at the farm. On-farm retail markets may range from simple operations, such as selling pumpkins and bales of straw for fall decorations at a farm stand, to more complex operations, such as an orchard with a retail store. Advantages of On Farm Retail On farm retail have several advantages, including no transportation costs – customers come to the farm, No standard pack/grade, experiential buying, provides instant credibility for “locally grown”. Disadvantages of On Farm Retail On farm retail have several disadvantages, including requires selling face-to-face, stretched boundaries, location challenges, liability, many small transactions, can be capital-intensive to develop market. RURAL PRIMARY MARKET There are many regular and periodical markets in rural and interior areas known as haats, shandies, painths and fairs. Farmers bring their produce there on fixed days of the week and sell it to consumers. These are owned and managed by different agencies, namely, individuals, panchayats, municipalities, including State Agricultural Marketing Boards (SAMBBs) / Agricultural Produce Market Committee (APMCs). Advantages of Rural primary Market Rural Primary Market have several advantages, including no requirements for sales volume, no standard pack or grade, provides instant credibility for “locally grown”. Disadvantages of Rural primary Market These markets lack facilities and hygiene and are highly congested, in deep contrast to agricultural markets in developed countries. These markets are usually managed by panchayats and municipalities who collect ground rent and fees but the funds are not used for their betterment or for developing infrastructure. ROAD SIDE STANDS A roadside stand is a temporary facility set up to sell product at a roadway or other heavy traffic area away from the farm or Organized farmers market. Advantages of Road Side Stands Road Side Stands have several advantages, including no volume or packing/grading requirements, the possibility of serving as a test market for products, the producers’ ability to set the schedule, improvement to farm’s marketing location. This option allows the farmer to stay on or near the farm, minimizing transport to market. If set up as an “honor-system” stand, this option has minimal time and infrastructure needs. Disadvantages of Road Side Stands Road Side Stands have disadvantages, including location challenges, many small transactions and high marketing costs, requires selling face-to-face. A more substantial roadside stand requires an investment in infrastructure, directional signage, marketing, and staffing. U-PICK /PICK-YOUR-OWN/ CUT OR CHOOSE-YOUR-OWN OPERATIONS U-Pick/Pick-Your-Own/Cut or Choose-Your-Own operations occur when consumers visit the farm where a product is grown and go to the field to pick, cut or choose their own product. Advantages of U-Pick/Pick-Your-Own/Cut or Choose-Your- Own operations This channel have advantages, including reduced harvest and handling labour, lower equipment costs, potential for larger transactions and to sell lower-quality produce. Disadvantages of U-Pick/Pick-Your-Own/Cut or Choose-Your- Own operations This channel have disadvantages, including requires excellent location or superior advertising, liability, staffing and supervising customers, potential for crop damage and reduced yield volumes due to improper harvesting, requires lot more attention to public relations, crowd control to prevent theft and damage to crops. COMMUNITY SUPPORTED AGRICULTURE (CSA) In a CSA, the farmer sells shares or subscriptions for farm products to customers. A diverse selection of products is delivered to or picked up by customers at designated sites regularly for a specified time period. CSAs are typically used to market produce, but can also be used to market other products such as meat and flowers or a mixture of products. Advantages of Community Supported Agriculture (CSA) Community Supported Agriculture have advantages, including reduce grower risk and operating capital needs, reduce customer sensitivity to cosmetic defects, help build sense of community and farm brand, reduces selling/marketing time during the production season. Disadvantages of Community Supported Agriculture (CSA) Community Supported Agriculture have advantages, including requires intensive marketing, heavy reliance on word-of-mouth – risk of dissatisfied customers, requires careful crop planning & season extension, season-long agreement with customers E-COMMERCE MARKETPLACE E-Commerce is referred to those strategies and techniques which use online ways to reach target customers. Trading is carried out electronically with the use of online Platform and Application. It converts the farmers sell agriculture products in the physical world to selling in the virtual world. Farm to Farm (F2F) - Farmers sell Agriculture products to each other. That is, the supplier is a farm and the customer is another farm. Farm to Customer (F2C) – Selling Agriculture products to customer or an individual via the Internet. Customer to Customer (C2C) - The supplier and buyer are individuals. Advantages of E-Commerce Marketplace Farmers direct connect with buyers, retailers, traders, corporate, industrial users, exporters and sell their products directly them. Ensure fair and remunerative price to farmers through price discovery. Price realization for farmers through reduce gap between producer’s price and consumers rupee.Making Agriculture products distribution strengthen by transparency, wide market, open for 24 hours/ continuous market, no waste of agricultural products. Disadvantages of E-Commerce Marketplace Lack of physical contact with the product, lack of confidence, delivery time and shipping costs may sometimes be a deterrent DIRECT MARKETING INITIATIVES ApniMandi Initiative in Punjab The ApniMandi was started by the Punjab Mandi Board on the lines of the ‘Saturday Market’ in the UK and the USA. It offers farmers and growers a place in towns of Punjab and Chandigarh to sell their produce directly to consumers. ApniMandi was first established in 1987 at Mohali (Punjab) and after its success, it was introduced in 27 towns in the state. E-Krishi Kendra Initiative in Gujarat (www.ekrishikendra.com) E-Krishi Kendra was started by E-Agro Tech Pvt. Ltd. It provides services to farmers, such as farmers can directly sell farm produce, farmers can create own supply chain and trace a range of mandis in a single click.